“I do not know of any organization that achieves budget discipline from the bottom up. We need to be sufficiently top-down to get the job done. Nobody’s going to volunteer to make the kind of changes that are required.”
                  Christopher Edley (94)

Some of the discussion on Chris' post regarding the letter from the 36 in defense of their pensions has focused on the number of those affected.  Part of the problem in calculating this number has to do with the lack of clarity about what constitutes "covered compensation."  I cannot clarify for individual cases but the official program description for UCRP (for members with Social Security) indicates on page 26 the following definition of Covered Compensation:

Covered Compensation 
 
The gross monthly pay that an active employee receives for a regular and normal appointment, including pay while on sabbatical or other approved leave of absence with pay. Not included are:

pay for overtime unless in the form of compensatory time off;

pay for correspondence courses, summer session, intersession and for interquarter or vacation  periods or University extension courses, unless such employment constitutes part of an annual or indefinite appointment;
 
pay for a position that is not normally full time except if paid on a salary or hourly rate basis;

pay that exceeds the full-time rate for the regular, normal position to which the member is appointed;
 
pay that exceeds the base salary as negotiated under the General Health Sciences Compensation Plan or Medical School Clinical Compensation Plan;

UC"s latest image disaster came in the form of what I dearly hope is UC's final 2010 appearance in the California press.  Today's San Francisco Chronicle headline reads, "Highest-paid UC execs demand millions in benefits."   This refers to a demand by 36 senior executives that the Regents authorize UC to "calculate [their] retirement benefits as a percentage of their entire salaries, instead of the federally instituted limit of $245,000. The difference would be significant for the more than 200 UC employees who currently earn more than $245,000."

The salaries and the payouts are explained in this graphic. A $400,000 salary with the cap yields a pension of about $184,000 a year, but is bumped to $300,000 a year without.

I have never seen comments on any SF Chronicle story like the ones prompted here. There were 750 when I started this post. There will be over 800 before I finish.  I would guess that 740 of them are negative, except that I haven't found a supportive one yet.  Hundreds are furiously hostile. In the poll, only 5% think that the higher pensions should be granted if the university incurred a legal obligation to pay them.  Nearly two-thirds take option 3, which is that the letter writers be fired.

The symbolism of the pension spike is way beyond the actual money: UC's top officials, the ones who set the policies that affect the state, display selfish greed, total oblivion to the public mission, and a tight focus on lining their already bulging pockets. It confirms the majority suspicion that universities like UC care much more about the "bottom line" than about education (Question 6).  People don't see anything in this kind of effort that universities are supposed to be about.  There is in the background a sense of the university's abandonment of the state's suffering middle class, and of course nothing for the poor who still want to send their kids to college. Tuition has tripled over the decade, debt goes up incessantly, public pensions are under attack exactly because of $300,000 payouts,  thousands of students show up to UC every quarter with nothing but borrowed petty cash, and yet what they see senior executives spending their time on is maximizing their personal take.  As one commenter said, "oink oink oink. I know this is a dumb question but what happened to the UC system's mission of educating students?"  And these aren't even the commenters who are angry that UC has good pensions to begin with.

By Michael Meranze

With so extensive a demand, it follows that a very large part of our social comment--and nearly all that is well regarded--is devoted at any time to articulating the conventional wisdom.  To some extent, this has been professionalized.  Individuals, most notably the great television and radio commentators, make a profession of knowing and saying with great elegance and unction what their audience will find most acceptable.  But, in general, the articulation of the conventional wisdom is a prerogative of academic, public, or business position.  Thus any individual, on being elected president of a college or university, automatically wins the right to enunciate the conventional wisdom.
                     John Kenneth Galbraith

The Los Angeles Times responded with remarkable alacrity to the news that California legislators--concerned by the continual fee hikes and the size of executive compensation at UC and CSU--might begin to demand greater oversight over how state monies are spent in higher education.  Indeed, I can't think of a more rapid response to an educational issue from the Editorial Board in recent years.  One day we hear that legislators are considering certain steps, the next day we get a counter-blast from the state's leading newspaper.  But is this abstract possibility really the most pressing issue for the LAT to weigh in on?  What is the fuss all about?  The editorial gives clues about what is really at stake--and it gives a glimpse into the conventional wisdom of California's elite opinion makers.

State officals are caught in a mental loop, and it is nicely visualized by state treasurer Bill Lockyer's forlorn op-ed in the Los Angeles Times.  Arguing that "California Isn't Broken," and anxious to head off implausible suggestions that the state could default on its debt, Lockyer and coauthor Stephen Levy write,

During the current fiscal year, general fund revenues are expected to total $89.4 billion. Education spending under Proposition 98 will total $36 billion. That leaves $53.4 billion available to pay debt service on bonds — more than eight times the $6.6 billion the state will need.

Thus is raised the specter, in its very denial, that the state might spend the entirety of its non Prop 98 money on servicing its own debt.

The article goes on to debunk the myths that California has lost more jobs and businesses than other states, that its decline is worse than that of the country's, and that its structural budget deficit is caused by runaway spending:

Thirty years ago, general fund expenditures totaled about $7.43 for every $100 of personal income. In the 2009-10 fiscal year, that ratio was almost $2 less, at $5.52 for every $100 of personal income. In the current fiscal year, per capita general fund expenditures will total $2,246, less than the $2,289 spent 10 years ago and roughly equal to the inflation-adjusted level of 15 years ago.

But then what? The obvious question is, "so what's wrong with spending less"?  The next obvious question is, since we still have a deficit, why not spend still less than we do right now?  These are entirely rational questions for our austerity culture, and they need direct and concrete answers. Nobody is going to care about cuts in general unless Lockyer, Jerry Brown and the new Sacramento order can rekindle belief in a causal connection in which cuts in public investment causes economic decline.  But how will they, and who will help them?

The Los Angeles Times reports that there is a growing sentiment among legislators in Sacramento that they should have greater oversight and influence not only in the amount of money that UC gets but in how it is spent.  Strikingly, the three points that seem to have mobilized the greatest concern are the size of executive pay and perks, the continual fee increases, and the move by UCOF and UCOP to push towards more out-of-state students.  As the LAT puts it, "Lawmakers say the combined actions threaten a fundamental promise of life in the Golden State: an affordable, high-quality public college education."

You can read the entire story HERE.

Whatever message the Regents wanted to send by passing the Commission on the Future recommendations, the cuts message is what came through. UC officials are promising less to future students - that's what the reporters picked up.

The sacrifice might go somewhere if it were done in an atmosphere of fairness, intelligence, and mutual attention and respect.  The UCOF process did not increase trust or communication -- the Regents, with the exception of the student Regent, did not appear at any of UCOF's listening meetings.  We'll talk about fairness in a later post on pension reforms. Then there's intelligence in planning: this would involve major educational goals for the University and a revenue plan to support it.  One may not expect major educational insight from the Regents, but revenues are their central responsibility.

The Recommendations I didn't get to in Part I take a shot at these. How do they do?

A UC colleague writes from Italy:
The riots broke out after Berlusconi's government – which is, among other things, attempting to pass a massive and massively impopular overhaul of the Italian universtity system, under the name of lega Gelmini – obtained a vote of confidence (fiducia) in the Chamber, amidst much manoeuvring, with Berlusconi thus managing to remain in power. The riots went on all afternoon and were extremely violent – in fact, by far the most violent Rome has witnessed in decades.

For further information, please see :
– a recent NYT article,  offering a reasonable (though very partial...) introduction to current student protests in Italy:
– The Guardian on the fiducia vote saving Berlusconi's head today and the subsequent student riots in Piazza del Popolo, in Rome
– La Repubblica on today's riots in Rome,  and other student actions throughout the country
– The International Herald-Tribune's blog on the Rome riots, with plenty of links to videos of the events

The Regents met today to discuss UCOF (which they approved) and also President Yudof's Pension proposal (modified to protect the interest of some high earners) which they also approved.  The actual pension proposal is here.  You can also find audio of the Regents meeting here.

The short, special Regents meeting on Monday, December 13 will consider pension changes and the ratification of the recommendations of the Commission on the Future. Most commentators have found the Report uninspiring. The San Francisco Chronicle focused on elements that will reduce services to and contact with in-state students (more out-of-state students, on-line courses, and three-year degrees).

There's more to the Report that this, but California is in the midst of a deep crisis in which its political and business leaders adhere to a world view that makes real solutions impossible.  This bipartisan view is now taking austerity to be the way forward, although it is destroying the chance to renew public infrastructure and is starting the abandonment of a generation of young people.   The UCOF Report needed to create a context that would give the public a reason to change the framework of political debate.

Here are five sample steps in a purely instrumental version that could be developed much further. I deliberately omit all of the higher and deeper things universities do, like solving social and culture problems ignored by technology, or like inventing new, more humane philosophies.

• Economic recovery and renewal depends on high levels of educational attainment. Claudia Goldin and Lawrence Katz's remarkable economic history showed strong causal ties between U.S. early educational development and economic success: the U.S. was far ahead of European rivals in high school graduation rates by 1940 and developed a similar lead over virtually every other country in college graduation rates in the thirty years after World War II (Goldin and Katz).

• But we have an educational attainment emergency. The US has completely lost its educational lead.  For the first time in its history, younger people are less educated than their baby-boom parents (National Center; College Board, figures 1-4). The American proportion of students starting college who actually finish is now 56%, or 29th of the 30 OCED countries (Bowen et al. 2009, p.4). California, one of the world’s wealthiest places, has seen one of the world’s most astonishing declines in college achievement. The state’s continuation rate fell from 66 percent to 44 percent in just eight years (1996–2004). California’s rank among states in investment in higher education declined during the same period from fifth to forty-seventh.  The state has cut its investment in higher education by close to 50 percent since 1980, forcing tuition increases like the 60 percent rise at the University of California from 2004 to 2008, which was followed by a 32 percent rise between 2009 and 2011.

• The 50-60% reduction in public funding for California's universities coincided with this decline, and also caused it.  Contrary to popular myth, replacing public with private money reduces educational access and the quality of the result.  I will say more about this below, when I discuss Recommendation 7 in the UCOF Report.

• More egalitarian societies are more efficient and have higher educational attainment. This is a longer argument, but the circumstantial evidence is clear: the inequality boom has coincided with educational decline at every level.

• Renewed public purposes will allow a more efficient and attractive University of California.  A redesigned and more effective UC, one closer to its core public and scholarly missions, is TBD at a later date.

The public is ready to hear this kind of a sequence -- and to do something about it. For example, the Public Policy Institute of California recently found that three-fourths of Californians think higher education funding is inadequate.   But the University of California has been having a hard time making the most of its actual popularity with Californians.  It is torn between elitism and egalitarianism. The genius of the Master Plan was to have it both ways, but UC's policy frameworks and PR reflect the anti-egalitarian world view I mentioned at the start, although without actually wanting the social stratification that results. This means that UC's outreach and social missions are unconvincing to a broader public that is nonetheless waiting to be brought back in.

Where does the flagship UC Future report fit into this?

By Michael Meranze

Next came Fraud, and he had on,
Like Eldon, an ermined gown;
His big tears, for he wept well,
Turned to mill-stones as they fell.

And the little children, who
Round his feet played to and fro,
Thinking every tear a gem,
Had their brains knocked out by them.

      Shelley, The Mask of Anarchy

As Thatcher’s epigone marshal their forces to dismantle the social contract in England, the long devolution continues in the United States. But while Cameron brandishes his vision of a “big society” here there is no semblance of an intellectual vision. In part, this difference lies in the intellectual legacies of the English and American political classes: there Thatcherism here Reaganism. Thatcher’s attack on society was rooted in a brutal individualism and aimed to secure Britain an ideological preeminence in the Atlantic alliance to compensate for the loss of empire--it was not for nothing that she was dubbed the "Iron Lady." Reagan's regime was no less destructive.  But it was more utopian—albeit a utopianism bought with the substitution of futuristic fantasy for a genuine grappling with reality, the cheery predecessor to the Bush administration's contempt for those operating with a “reality based world view.”

The Commission on the future has released its final report.  You can read it here.  Coverage in the LAT can be found here.  The Sacramento Bee coverage is here.  Check it out.

By Michael Meranze

I met Murder on the Way—
He had a mask Like Castlereagh
Very smooth he looked, yet grim;
Seven bloodhounds followed him:

All were fat; and well they might
Be in admirable plight,
For one by one, and two by two,
He tossed them human hearts to chew
Which from his wide cloak he drew.
Shelley, The Mask of Anarchy


The dapper Cameron has replaced the corpulent Castlereagh; England does not lead but follows the austerity bloodhounds; and the police kettle rather than kill protesters. But the English state is once more threatening to eat its common folk in the interest of the authority of capital. Despite large and growing protests including massive displays on November 10th and 24th and numerous campus occupations, the Tory-little Tory coalition plans to bring the bill to allow universities to raise student fees to a vote in Parliament on December 9th. With this vote, Cameron and Clegg accelerate their effort to end the public university in England and throw students and potential students into debt for decades. At the same time, as Iain Pears has argued, the state will game the system against the humanities and social sciences by holding the costs of certain science and priority courses unnaturally low while pushing universities to emphasize education for business instead of the business of education.